Shopfitting Finance

What is shopfitting finance?

At Clifton Private Finance, we understand the unique challenges faced by retailers in need of shopfitting finance. That's why we offer tailored financing solutions that empower you to transform your retail space without straining your cash flow or hindering your liquidity.

On this page, we'll explore what shopfitting finance entails, how it works, the benefits it offers, and how you can apply.

The Different Finance Options for Shopfitting

There are two primary financing routes available for shopfitting projects: hire purchase and operating lease.

Hire Purchase - With hire purchase, your business pays a deposit upfront and then makes regular payments over an agreed term, usually 12-60 months. At the end of the term, your business owns the shopfitting equipment and assets outright. Hire purchase is suitable for businesses wanting to eventually own the fixtures and fittings. It also allows you to claim capital allowances and tax relief on the assets as they depreciate.

Operating Lease - With an operating lease, your business pays a monthly rental fee to use the shopfitting equipment and assets for a fixed term, typically 2-5 years. At the end of the term, you can choose to return the assets, extend the lease, or purchase them at a reduced price. Operating leases offer maximum flexibility and convenience. Your business never owns the assets and therefore does not have to worry about maintenance, disposal, or depreciation costs.

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How Shopfitting Finance Works

We understand that financing a shopfitting project for your retail business can seem daunting. Our team of experts is here to guide you through the process and make it as seamless as possible. Financing shopfitting through us is a straightforward process that works just like any other type of business loan or asset finance.

Here's a brief overview of how we can help you acquire the shopfitting equipment and assets your business needs:

Discuss your requirements and budget with our specialist brokers. We'll take the time to understand your specific needs, whether you're opening a new store or renovating an existing one. Our brokers will assess your financial situation and advise on the best financing options for your business.
Select the desired shopfitting equipment, fixtures, and furnishings, and agree on terms with suppliers. With our extensive network of equipment suppliers and contractors, we'll help you choose the right shopfitting assets to create the perfect retail environment. We'll negotiate competitive pricing and terms on your behalf.
Sign the finance agreement, and the lender pays the suppliers directly. Once you've selected your shopfitting assets and financing option, you'll sign the finance agreement. Our trusted lenders will then pay the suppliers directly, allowing you to receive and install the equipment without any upfront costs.
Receive, install, and start using the shopfitting assets immediately. As soon as the finance agreement is in place, you can have the equipment and fixtures delivered and installed at your premises, ensuring minimal disruption to your operations.
Make regular, affordable payments over the agreed term. With flexible financing options like hire purchase or operating leases, you'll make manageable monthly payments tailored to your cash flow. Our team will work with you to structure a payment plan that suits your budget.
At the end of the term, you can choose to own the assets outright, return them, or upgrade to newer models. Depending on your financing option, you'll have the flexibility to either purchase the shopfitting equipment and fixtures outright, return them to the lender, or upgrade to the latest models available.

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Benefits of Shopfitting Finance

Save Money and Improve Cash Flow

Acquire shopfitting assets without large upfront costs
Fixed monthly payments make budgeting easier
No need to tie up working capital in equipment purchases

Enjoy Flexibility and Convenience

Flexible terms ranging from 12-60 months
Options to return, own, or upgrade assets at the end of the term
No need to worry about maintenance, disposal, or depreciation costs (with operating leases)

Benefit from Tax Advantages

Claim capital allowances on purchased shopfitting assets
Deduct lease payments from taxable income

Stay Competitive and Compliant

Access the latest shopfitting technologies and equipment
Create an inviting and modern retail environment
Regularly update and refresh your store without delay

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Potential Drawbacks of Shopfitting Finance

While offering substantial benefits, it's important to consider the potential drawbacks of shopfitting finance:

Higher overall cost due to interest and fees (compared to outright purchase)
Commitment to fixed term and regular payments, regardless of business performance
Risk of penalties, legal action, or repossession for missed payments
Exposure to depreciation and obsolescence, especially for rapidly changing technologies and design trends

At Clifton Private Finance, our experts will ensure you make informed decisions aligned with your budget and long-term objectives, weighing both the advantages and potential drawbacks.

What Can Be Financed?

Our shopfitting finance solutions cover procurement of almost any equipment and assets required for retail fit-outs and renovations, including:

Fixtures and fittings (shelving, display units, counters)
Furniture (chairs, tables, desks)
Lighting and electrical installations
Flooring and wall coverings
Refrigeration and cooling equipment
Point-of-sale (POS) systems and hardware
Storage and organisation solutions
Specialised tools and machinery

From small boutique outfits to large department stores, we can help finance your shopfitting project competitively and seamlessly.

How We Can Help

Looking for shopfitting finance in the UK? Our expertise can assist with:

Evaluating if finance is the best option for your retail fit-out needs
Determining the optimal finance types for your equipment and asset requirements
Calculating affordable budgets, rates, and terms to maintain healthy cash flow
Seamlessly managing the entire finance application process

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Frequently asked questions

You can find the most common questions asked about business loans below. If you have a question that isn't answered here, please email us at commercial@cliftonpf.co.uk

What is the meaning of asset finance?

Asset finance is a way of spreading the cost of equipment used by businesses over time, allowing companies to keep a strong, consistent cash flow whilst minimising upfront costs.

There are many asset finance products to choose from when considering asset finance, such as hire purchase, operating leases and finance leasing, so there are plenty of options to consider for your every business need.

What is the asset financing structure?

The asset financing structure is the financial arrangement organised between businesses and lenders to secure funding to acquire equipment that is directly related to the operation and growth of the business.

Asset financing typically involves several key elements, which are as follows:

Assets used as collateral:

A lender will likely secure finance against the asset itself or other assets, which can be tangible or intangible.

Tangible Assets: vehicles, construction equipment, real estate, or inventory.
Intangible Assets: intellectual property, accounts receivable, revenue streams.

Types of Asset Financing:

The following is a list of several products available to business owners as options for asset finance:

Leasing: Businesses that choose to lease do not outright own the asset and pay a monthly cost to use the equipment at a much lower cost than purchasing the equipment.

Hire Purchase (HP): A standard choice for businesses, this option allows you to eventually own the asset you’re paying for after the payment period has ended.

Asset-Based Lending (ABL): A business borrows money against an asset as collateral, and it’s commonly used to acquire working capital for operational or growth needs.

Loan-to-value (LTV): The loan-to-value ratio of assets is the calculation of a percentage which helps to determine the risk of the loan itself. A high LTV ratio typically indicates a higher interest rate for businesses as it’s far riskier to finance.

A low loan-to-value ratio is generally more comfortable for lenders, lower repayment periods and lower fees ensure that the asset can be repaid easily. If an asset depreciates over time, however, and becomes under-collateral, this means that the lender wouldn’t be able to fully recover the amount owed if the asset is repossessed.

Should there be a major decrease in collateral value, lenders might seek to acquire additional collateral from the business owner, or even increase fees and interest, impacting cash flow.

What is the difference between asset finance and a business loan?

Business loans are products designed for general use throughout businesses. They can be used for general business needs, including asset finance, which has the added benefit of the asset not necessarily being used as collateral for the loan itself.

Asset finance, however, is more specific: its use is for the acquisition of assets and is restricted to only that. Lenders will use the asset itself as collateral for improved lender comfort, being reclaimed in the event that you do not pay your asset finance.

One major distinction between asset finance and business loans is interest rate: asset finance interest is typically lower compared to unsecured business loan interest, which is notably higher.

What are the risks of asset finance?

Should you fail to repay your asset finance, you can face an impacted credit score and ultimately lose the asset in a repossession.

Depending on the asset you’re funding, there’s also a risk of depreciation - particular risk for vehicle finance.

In some cases, if a machine you’re financing is essential to the functioning of your business operations, then factors such as depreciation or loss of efficiency of the equipment can cause lender discomfort, leading to slightly higher interest rates.

Who needs equipment financing?

Equipment financing is typically used by growing businesses looking to limit the impact on cash flow from an expensive piece of equipment by spreading the cost over a period of time.

Small and medium-sized businesses (SMBs) can use equipment finance to limit the loss of capital and scale up operations without a massive upfront cost to deal with. Accessing equipment finance isn’t limited to a single industry, its uses spread from healthcare with MRI scanners, to construction, manufacturing, agriculture and more.